Wipro board meet today: What would be the size of share buyback scheme? Zee Business decodes

Earlier this week, Wipro in its regulatory filing had said that the company’s board of directors will be considering a proposal to buy back equity shares of the company, besides other issues, at a meeting scheduled to be held over April 26-27, 2023.

Wipro stock has dipped around 28 per cent in the last one year - Image Source: Reuters

Wipro share buyback: Ahead of its board meeting today to announce the earnings for the March quarter and dividend for the fiscal year 2022-23, the board of Wipro – India’s 4th largest IT services company – is also expected to announce a share buyback scheme. Earlier this week, Wipro in its regulatory filing had said that the company’s board of directors will be considering a proposal to buy back equity shares of the company, besides other issues, at a meeting scheduled to be held over April 26-27, 2023.

"The outcome of the Board meeting will be communicated to the stock exchanges soon after the conclusion of the Board meeting on April 27, 2023," Wipro said in the filing.

Historically, Wipro announces buyback of shares at a premium of between 17-22 per cent from the date of the announcement, according to Zee Business research analyst Arman Nahar. He added that the company uses nearly 23-27 per cent of its cash/bank/investment to buy back shares.

TRENDING NOW

Year	Share price on buyback announcement	Premium
2020	Rs 329	22%
2019	Rs 279	17%
2017	Rs 265	21%

The stock price of IT major was flat with a positive bias at Rs 375.60 per share on the NSE today. One of the top laggards in 2022, the counter has dipped around 28 per cent in the last one year and has slumped by almost five per cent year-to-date.

Year	Buyback amount	Cash/Bank/Investment
2020	Rs 9,500	23.2%
2019	Rs 10.500	27.7%
2017	Rs 11,000	31.9%

As of September 2022, Wipro has cash/bank/investment of Rs 34,730 crore, Nahar said in research and added that the company has bought back about 4-7 per cent of the total equity shares in three years i.e., 2017, 2019, and 2020.

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Anil Singhvi shares view on Wipro buyback offer

Zee Business Managing Editor Anil Singhvi believes the company may announce a share buyback scheme of around Rs 8,000-9,000 crore, if any. He said this taking into account the historical chart of the previous buyback offers.

On a consolidated basis, the IT heavyweight is likely to report marginal growth sequentially in top and bottom lines during the Q4FY23, Zee Business Research said in its preview, expecting that the margins may expand by around 80 basis points during the quarter.

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